by joshbersin
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Published September 16, 2009
· Updated September 16, 2009

TodayTaleo announced Taleo 10, the company’s new product family name for Taleo Enterprise Recruiting, Taleo Performance, Taleo Compensation, and Taleo Development. Yes, today Taleo formally announced that the company is in the end-to-end “Unified Talent Management” platform market. Did the company just roll a “strike?”

Let me give our readers a few key highlights, and we will be publishing a detailed research bulletin for members in the coming weeks.

Taleo 10, the company’s new family of products, is positioned as the “alternative to ERP.” The story, which has a few minor flaws, talks about how organizations have spent billions of dollars automating their physical capital systems (financial systems, manufacturing, logistics) but in fact have spent very little money automating and building software systems to manage people. People, of course, are appreciating assets while equipment and facilities are depreciating assets. So, as Taleo spins it, it is time to ratchet up spending on talent management software.
This is, in fact, a very good argument – one that has been made for many years by learning management companies and other HR software providers. I believe that Taleo’s excellent marketing and the company’s broad reach will help all organizations go back and re-sell their investments in talent management platforms. Taleo’s argument against ERP is that these systems were never designed for people management and have cost organizations as much as $12,000 per employee to implement. Much of what Taleo is saying is very true, but of course the ERP vendors are not standing still. Nevertheless, Taleo wants to distance itself from other talent management providers with this argument. It will sell: our latest research on the Customer Satisfaction with Talent Management Platforms shows that only 14% of organizations are considering using their ERP for talent management.

Today Taleo formerly launched Taleo Development, a new software platform which uses Taleo’s beautiful new user interface to enable employees and managers to easily build flexible development plans. Taleo Development will help Taleo customers solve the very challenging problem of making it easy for managers and employees to create REAL development plans (not the little paragraph at the bottom of the performance appraisal). The product is innovative and will get a lot of interest from L&D professionals – but it is not an LMS.
Development planning is a feature set which has been well developed in Learning Management Systems for many years, but with the advent of new performance management applications has still been fairly difficult to use. I believe the new Taleo offering will give many HR managers a reason to invest in Taleo Development so they can avoid spending more money on their LMS (which many companies consider a “legacy system”).

Seperately from Taleo Development, the company introduced a reseller partnership with Learn.com. Taleo Development will be an open system which will connect to any vendor LMS, but today the primary “go to market partner” is Learn.com. There are many good reasons for this: Learn.com is a 100% SaaS provider, the company has a highly flexible user interface like Taleo, and Learn.com does not have a competitive performance management product of its own.
Taleo has done a very shrewd “end-around” the LMS market with this offering. By seperately building and pricing a development planning system, the company can sell and deliver a solution for talent development without making huge investments in an LMS. The Learn.com partnership is likely to go well, but I expect Taleo will stay LMS-Neutral for a year or so.

The new release of Taleo Enterprise Recruiting (formerly called Monarch) uses the company’s new Flex-based user interface, which is modeled after Kayak.com. (Kayak.com is the most usable travel website I have ever used, you should check it out). There are many exciting innovations in the Taleo user interface and in fact I believe Taleo is now creating a new standard for web applications which manage hundreds of records at a time. Consider the problem of resume overload in most companies: Taleo 10 lets a recruiter or staffing manager very easily sort, filter, select, prioritize, and manage large numbers of candidates.

Taleo showed off the company’s new i-Phone application, which allows employers to easily create employee-brand i-Phone Applications. This little application gives you a sense of where “next-generation” recruiting is going. (Madeline Laurano’s new Talent Application Systems 2010 research describes this in detail.) You, as an employer, can create an i-Phone application with your brand which lets any potential candidate check your open requisitions, forward job openings to friends, submit a resume, and manage their schedule for interviewing. This is a very compelling little application.

Taleo highlighted the Taleo Talent Grid, which Madeline Laurano wrote about yesterday. The Taleo Grid is Taleo’s terminology for the company’s Knowledge Exchange (customer social network), Solution Exchange (new partner program), and Talent Exchange (a way for employers to share candidates through a standardized user profile). Each of these is new and emerging and we will watch them closely.

Finally, a somewhat understated announcement which will become very important over time, Taleo announced the acquisition of Worldwide Compensation and the introduction of Taleo Compensation for Small and Medium Business. Worldwide Compensation was a small but sophisticated company that built a complete enterprise compensation system. We believe the company only had a few customers (perhaps five), but was partnered with Taleo over the last several quarters. I had a long conversation with one of Taleo’s Compensation customers (a global trucking company) and they were quite pleased with the product’s capability, even though they believe it is still an early product.

So What does All this Mean

This is a very important announcement for the HR software industry. We have been working closely with Taleo for several years and watching the company rapidly build out its end-to-end talent management strategy and they are executing very well. While most of these products are still new (e.g. even Taleo Performance is still a new offering with many features yet to be added), the company is now very well positioned. In fact, I believe Taleo is large enough (with more than 4,000 total customers) to really change the shape of this market.

Remember that Taleo is in many ways one of the “senior providers” in this market. The company just celebrated its 10 year anniversary and over these years has developed an excellent reputation for customer service, support, and delivering on its product promises. I interviewed more than 10 Taleo customers for the various customer sessions I conducted and every single one had a positive and realistic relationship with Taleo. Taleo’s customers understand that there will be bugs and challenges in any software and they generally trust that when Taleo says they will do something, the company delivers.

While many of the products demonstrated this week are somewhat untested in the market, the strategy is clear and demonstrates that Taleo clearly understands the requirements for end-to-end talent management software. With such an exciting new user interface and a very large install-base, I believe Taleo will soon become a “top contender” on most talent management software RFPs.

In a few weeks we will be introducing two major pieces of research which will help you understand this market: Talent Management Systems 2010® (our flagship research on talent management platforms with product comparisons, market share, market size, and vendor profiles), and The Customer Experience with Talent Management Systems®: An In-Depth Analysis of Customer Satisfaction. Both of these research reports will further help you understand this market and the role Taleo plays.

The Talent Management software market is large, growing, and highly competitive. I believe that Taleo’s announcements will not only help Taleo grow and take on a greater share of this market, but will also grow the size of the market itself. “Talent Management Software” is still a fairly arcane topic for IT and business leaders. With Taleo waving the flag and helping companies understand why these systems are so important, the entire market will get larger. This will help all buyers and vendors make the case for this important new category of enterprise software.

I have demoed Taleo 10 and I must say it matches every bit of the description you have given in true letter and spirit. The user interface is sheer eye candy and very intuitive.
Coming from an ex PeopleSoft HCM background, I have been pleasantly surprised at the ease of navigation and the GUI that Taleo brings to the fold. Its definitely a product to wait n watch closely.